Drought stress is a major limitation in wheat production around the globe. Organic amendments could be the possible option in semi-arid climatic conditions to mitigate the adverse effects of drought at critical growth stages. Wheat straw biochar (BC0 = Control, BC1 = 3% biochar and BC2 = 5% biochar) was used to alleviate the drought stress at tillering (DTS), flowering (DFS), and grain filling (DGFS) stages. Drought stress significantly reduced the growth and yield of wheat at critical growth stages, with DGFS being the most susceptible stage, resulting in significant yield loss. Biochar application substantially reduced the detrimental effects of drought by improving plant height (15.74%), fertile tiller count (17.14%), spike length (16.61%), grains per spike (13.89%), thousand grain weight (10.4%), and biological yield (13.1%) when compared with the control treatment. Furthermore, physiological parameters such as water use efficiency (38.41%), stomatal conductance (42.76%), chlorophyll a (19.3%), chlorophyll b (22.24%), transpiration rate (39.17%), photosynthetic rate (24.86%), electrolyte leakage (-42.5%) hydrogen peroxide (-18.03%) superoxide dismutase (24.66%), catalase (24.11%) and peroxidase (-13.14%) were also improved by biochar application. The use of principal component analysis linked disparate scales of our findings to explain the changes occurred in wheat growth and yield in response to biochar application under drought circumstances. In essence, using biochar at 5% rate could be a successful strategy to promote wheat grain production by reducing the hazardous impacts of drought stress.